India may reduce import duties on different goods like industrial items, including EV and medical devices, to evade retaliation from tariff imposition under Section 301 and maintain good trade relations with the US.
Key Points of India Agrees to Lower Import Duties to Counter US Tariff Threats
- India is planning to reduce import duties on selected industrial goods like EV components, medical devices, and others.
- The move aims to avert potential reciprocal tariffs by the US under Section 301 of the Trade Act.
- Bilateral trade between India and the US has increased to $200 billion in 2023, but tensions over tariffs persist.
- Critics argue that the import duty cut will weaken India’s “Make in India” initiative.
- The US Commerce Secretary mentioned that India would need to stop buying defense products from Russia to improve trade relations.
Why is the US threatening India and other countries with high tariffs?
Trump mentioned that countries like Canada, India, and others have “ripped us off for years” by imposing high tariffs, which he sees as unfair. To counter this, he stated that the US would respond with a “tit-for-tat” approach, introducing reciprocal tariffs imposing equally high tariffs on those countries in return or even higher.
How has India responded to this?
India has responded cautiously to the US threats and agreed to reduce the tariff percentage for US-based goods in order to keep relations good and avoid retaliatory tariffs from the US.
Why did India agree to reduce tariffs?
India’s top authorities quickly decided to reduce tariff duties, fearing that the US would retaliate with tariffs up to 25% on Indian exports like textiles, pharmaceuticals, and engineering goods. Such a move would hurt India’s export-driven industries, which contribute significantly to its $3.7 trillion economy.
Impact on Domestic Industries
While the duty cuts could lower costs for Indian manufacturers reliant on imported components, critics argue they risk undermining domestic production:
- Medical Device Sector: Local manufacturers, already struggling against cheaper Chinese imports, fear being sidelined by duty-free US/EU products.
- EV Ambitions: Lower duties might boost Tesla’s entry plans but could slow India’s push for indigenous battery manufacturing.
- Renewable Energy: Cheaper imports may speed up solar projects but reduce incentives for local R&D.
Rajiv Nath of the Association of Indian Medical Device Manufacturers warned, “Zero duties will flood the market with foreign goods, making ‘Make in India’ unviable.”
Tariff System in the Spiritual World
According to Sant Rampal Ji, when a soul passes through various lokas (spiritual realms) like Brahma Lok or Ganesh Lok, it must “pay the tax” of the deities. This “tax” symbolizes the spiritual debt or the accumulated karmas that must be paid.
A soul moves through these realms based on the correctness of its worship. If the soul has not performed true worship, it remains trapped in the cycle of birth and death. Even if one has worshiped, but not as per the holy scriptures, that worship does not lead to salvation.
So, are you curious about how to achieve salvation, cross these barriers, and break the cycle of birth and death? Read this article to know the true way of worship
FAQs about India Agrees to Lower Import Duties to Counter US Tariff Threats
Q1: What is Section 301 of the US Trade Act?
A1: Section 301 allows the US to investigate and impose tariffs on countries deemed to engage in unfair trade practices, such as restrictive market access.
Q2: How will zero duties affect Indian consumers?
A2: Consumers will benefit from cheaper imported goods (e.g., medical devices), but in the long term, it will increase competition for local producers.
Q3: Which Indian exports face US tariff risks?
A3: Textiles, engineering goods, and pharmaceuticals are most vulnerable if the US invokes Section 301.
Q4: Why is a tariff considered a tax?
A4: A tariff is considered a tax because it is a mandatory fee imposed by the government on imported goods from other countries. It functions like other forms of taxation.
Q5: What are the four types of tariffs?
- Specific Tariff: A fixed charge per unit of an imported good.
- Ad Valorem Tariff: A percentage of the value of the imported goods.
- Compound Tariff: A combination of both specific and ad valorem tariffs.
- Protective Tariff: Designed to make imports more expensive to protect domestic industries.
